Scio Capital urges credit investors to reduce risk after September bond sell-off

• Scio Capital urged credit investors to reduce risk, warning September's bond sell-off shifted the risk-reward balance toward caution.
• ICE BofA US High Yield Index spreads widened 49 basis points to 3.12% in September.
• Spreads remained below their roughly 5% average since 2000, leaving room for further widening as borrowing costs pressure heavily leveraged companies.
• S&P Global Ratings expects European trailing-12-month speculative-grade defaults to reach 3% by June 2027, up from 2.6% today.
• Recommended positioning includes moving up the capital stack, increasing asset-based strategies and overweighting countercyclical corporate credit sectors.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Scio Capital LLP published the original content used to generate this news brief on October 18, 2026, and is solely responsible for the information contained therein.